Foher Fiatioes manufactures three lypes of liphtiog fatures. with model names of Silved, Gold, and Platinum. It applies all indired conts accorifing to an arnuat predetermined rate baved on deect labor hour. Ihe plant contiodler fas recommended that the company wwtith to an actevily based conting sytem. The controlerts stalf prepared the following cont estimates for next yeat fear 2) for the fecomtitended cost dtivers In addition, management estimated 45000 direct labor hours for year 2 Assume that the folloving cost dither volumes occurred in January. yeor 2 Labor costs are bosed on the contractual rate of $25 pet houk. Required: 6. Compute the predetermined rate for year 2 for use in the current product-costing system using direct labor-hours as the allocation base. b. Compute the per-unit production costs for each model for January using direct labor-hours as the allocation base and the predetermined rate computed in requirement (a). c. Compute the predetermined overhead rate for year 2 for each cost diver using the estimated costs and estimated cost driver unils prepared by the controller's staff to be used in an ABC system. d. Compute the per unit production costs for each product for January using the cost drivers recommended by the consultant and the predetermined rates computed in requirement (c). (Note: Do not assume that total overhead applied to products in January will be the same for activity-based costing as it was for the labor-hour-based allocation.) Complete this question by entering your answers in the tabs below. Compute the predetermined rate for year 2 for use in the current product corting system using direct labor-hours as the allocation base. 1 Foher Fiatioes manufactures three lypes of liphtiog fatures. with model names of Silved, Gold, and Platinum. It applies all indired conts accorifing to an arnuat predetermined rate baved on deect labor hour. Ihe plant contiodler fas recommended that the company wwtith to an actevily based conting sytem. The controlerts stalf prepared the following cont estimates for next yeat fear 2) for the fecomtitended cost dtivers In addition, management estimated 45000 direct labor hours for year 2 Assume that the folloving cost dither volumes occurred in January. yeor 2 Labor costs are bosed on the contractual rate of $25 pet houk. Required: 6. Compute the predetermined rate for year 2 for use in the current product-costing system using direct labor-hours as the allocation base. b. Compute the per-unit production costs for each model for January using direct labor-hours as the allocation base and the predetermined rate computed in requirement (a). c. Compute the predetermined overhead rate for year 2 for each cost diver using the estimated costs and estimated cost driver unils prepared by the controller's staff to be used in an ABC system. d. Compute the per unit production costs for each product for January using the cost drivers recommended by the consultant and the predetermined rates computed in requirement (c). (Note: Do not assume that total overhead applied to products in January will be the same for activity-based costing as it was for the labor-hour-based allocation.) Complete this question by entering your answers in the tabs below. Compute the predetermined rate for year 2 for use in the current product corting system using direct labor-hours as the allocation base. 1
